IKEA Opens its First Indian Store

After over ten years since communicating the idea of opening an Indian store, IKEA finally opens a 400,000 square foot (37,160 square meter) store in the southern city of Hyderabad India, where a great number of the items, including some cutlery and stuffed toys, will be priced at less than 200 rupees ($2.91), says a news report by Reuters.

Due to slowing growth in North America and European countries, IKEA is entering the Asia and South America, it is finally moving to India, targeting it’s growing middle class.

The store, popular for large out of town warehouse stores, is presently in the early stages of a transition to smaller inner-city showrooms as it tries to accommodate the changes in retailing brought on by the rise of online retailing. While the initial plan in India was for 25 traditional stores by 2025, the country will now get some of the smaller outlets.

The company is expecting a couple of years to go by before it is able to make any major profits in India, but it has plans to mitigate cost by sourcing goods locally. It nonetheless expects to one day make some major profits in India, as they have referred to India as their next really big market.According to Reuters, regulation dictates IKEA must source at least 30 percent of materials locally within five years of starting operation. Group Chief Executive Jesper Brodin, at a news conference on Wednesday, said India would become one of IKEA’s biggest sourcing markets in the future. At present, its top suppliers are China, Poland and Italy.It already sources about a fifth of its global supplies from India.

Other ways IKEA intends to change to adapt to the Indian Market according to the Wall Street Journal includes.

Giving up the do-yourself method of assembly. IKEA IS known globally for its do-it-yourself method of assembly, where buyers are expected to assemble their own furniture at home by reading instruction manuals. In India, IKEA would have 150 full time employees assembling furniture for customers all day as IKEA research has shown Indian are not likely to buy into the do-it-yourself method of assembly. IKEA also plans to sell cheaper products in the Indian store, although the store is counting on the rise of the Indian middle class, it has also made it a point to include a lot of really cheap products in its collection. The company also paid a visit to over 1000 Indian homes, checking out their eating, sleeping and entertainment patterns, they learnt customers in India would need firmer beds and a lot of dining tables. The Indian Ikea store also houses the world’s biggest IKEA restaurant

The store plans a quick expansion in India, IKEA India finance chief Preet Dhupar told Reuters that in Mumbai, where the next traditional store is planned for summer 2019, a city-centre format could open in the same year. And in third-out town Bangalore, the first traditional store, planned for 2020, could even be preceded by a city-centre format.


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